How much should an emergency fund be?

Wee_Pilsbury

Hi all

I'm a newbie in terms of this board and although I don't really have that much in the way of debt :eek: I am for the first time ever, intending to have an emergency fund to deal with emergencies rather than relying on Mr Plastic. What I'm wondering is how much per month is reasonable for an emergency fund and at what level is it reasonable to stop?

At the moment I have an emergency fund of £200 and I was thinking of adding £30 per month to it until I get to £500. I own a modern style flat that has only cost me £25 in maintenance costs this year and obviously I'm hoping that will continue. In terms of redundancy and being off work sick, I have a very generous redundancy scheme and I'm paid when off sick.

The great advice given on here has given me the push I need to get this sorted once and for all and any advice at all will be gratefully received.

Thanks in advance:beer:

Ddraig

Seriously as much as you can I would say.Myself its zilch,a prayer that my overdraft will juggle.Really want it sorted in 2010.

crawley_girl

Hi there

I think 'emergency' fund will vary from person to person. I too live in a block of flats and have to pay around £600 pa in maintenance. My boiler was replaced not 4 weeks back and cost me a few pence!!! And I spent £250 on getting my car through it's MOT and £150 on repairs after it was vandalised.

I had none of these expenses last year! I feel 'safe' if I have 1k in the bank or can access this amount. But that's just me!

Others say 3 x monthly salary incase the worst happens...

:heartpuls CG :heartpuls

rictus123

Its not easy to save 3Xmonthly salary though!

mark55man

true, but its not easy having to find it in a hurry if you haven't got it - without falling back into the arms of Mr Loan and Mr Card

savingmummy

I have no emergency fund never have and probably won`t for a long time. If you are able to do it then put whatever is comfortable for you to do x

wxman611

I'm not sure if you've heard of Dave Ramsey, but he says it should be 3 to 6 months of LIVING EXPENSES. So take your rent or mortgage, utilities, food, and gas and multiply that by 3 to 6.

McKneff

Put your emergency fund into a tax free mini cash ISA - instant access, some
can be up to 3% - just add to it each month till you have enough, Leave it until you need it. In April start another one with another provider, forget the first one till you do actually have an emergency.

mooomin

I am saving money into a savings account which will eventually go to pay off my loan (Can repay early but not overpay) This means that it doubles as an emergency fund - should something in the house go BOOM then I will use this money instead of my credit card

rictus123

McKneff wrote: »

Put your emergency fund into a tax free mini cash ISA - instant access, some
can be up to 3% - just add to it each month till you have enough, Leave it until you need it. In April start another one with another provider, forget the first one till you do actually have an emergency.

Naughty naughty!


you are only allowed 1!

Fortheloveofmoney

rictus123 wrote: »

Naughty naughty!


you are only allowed 1!

You are allowed 1 in each tax year so come 6th April you can start another.

Whilst paying back my debt I didn't have an emergency fund. The debt was the emergency. Since being debt free we've managed to save 7 months worth of living expenses which we keep separate from our other savings.